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Have you checked out HSH's new Home Value Tracker? See what's happening with home values in more than 400 metro areas!

Have you checked out HSH's new Home Value Tracker? See what's happening with home values in more than 400 metro areas!

Can I use an equity loan to pay off my mortgage?

Q: My home is valued at $195,000. I owe $127,000 on the mortgage. I want a 10 year equity loan to pay off the mortgage. Can I find lenders to do this?

A: Certainly! However, you'll find that rates for fixed-rate Home Equity Loans are much high than those on first mortgages -- about 7.26% right now. A short-term first mortgage -- 15 years or less -- can be had at about 4%. Shop around; it shouldn't be too hard to find a mortgage lender to offer you a ten-year first mortgage, but if you cannot find one, consider a 15-year term, then simply make extra payments to get the ten-year term you want.

Ask the expert
Keith Gumbinger
Keith Gumbinger
Mortgage Expert
Vice President, HSH.com
About Keith: Mortgage market observer and analyst with 35 years experience... (more)
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